Determining How Much to Charge for Private Advertisement on Your Website or Blog

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How much should you charge for private advertisement to be placed on your website or blog is an interesting topic because I have seen all kinds of ways people do this.

The popular and more established websites and blogs typically have a fixed pricing model, and usually have a plugin or a program integrated such as AdBrite that automates the process for them.  The process involves communicating with advertisers, accepting ads, posting ads, collecting payments, renewing ads and then removing ads when time is up.

The reason they are able to do this is because they are already well established, recognized and perceived as highly credible. Therefore they have a take it or leave it mentality. Think about it, will the New York Times negotiate back with you if you wanted to advertise on it?  But the local city newspaper might.

I have observed the smaller fish to often negotiate private advertisement manually through email exchanges or with the help of a Virtual Assistant like I do for many of my websites.  Often times, this involves pre drafted email correspondence that is simply modified for the name of the potential advertiser being communicated to.

The pre drafted email typically includes the number of unique visitors/views the website or blog is receiving, its Page Rank, Alexa rank and a few other enticing pitches.

What Rate to Charge for Private Advertisement?

But how do you decide what rate to charge for a private advertisement? As the saying goes “beggars can’t be choosers”, I have seen many take any kind of offer they get initially with the justification that some income is better than none.

But how do you calculate the true worth of your blog or website once more advertising inquiries start trickling in? Do you ask the advertisers to engage in a bidding war for space on your website?

One Simple Method

Here is a simple method to consider. Let’s say you have a website and you are contacted by a someone interested in advertising on a particular page of your website.

A simple approach you can take is to analyze that particular page’s traffic, and what the average pay per click cost of advertising would be for the particular keyword that the webpage is optimized for. In other words, what keyword will a web surfer have to type in search engines for this particular webpage to show up in the search listing.

You can then do some simple math and propose an advertising fee that seems to be fair and hopefully will be accepted by the advertiser, especially after you walk them through this straight forward, fair and logical approach. Below is a quick walk through of this.

If you feel that the advertiser will incrementally benefit more from having their ad on your website beyond just the webpage where their advertisement is on, you may decide to charge a premium in addition to the calculated rate above.  A good example of this is popularity and credibility by association. For example, if your website is a top 10 website, visitors may inherently perceive the advertiser as highly credible.

Also consider the fact that visitors who stumble upon your website may browse through the pages and end up seeing the advertiser’s ad despite not specifically searching for it.  There are behavioral analytics tools that can provide this level of intelligence.  If you have the data to support the rate you are asking, explain your logic to the advertiser to convey the value you bring to the table.

This “simple” method is obviously a bit trickier for a blog because a blog has static “window” or side panes around all its content, unless you specifically customize each page which partly defeats the purpose of a blog in my opinion.

Calculation Walkthrough

Take a website that I co-built with a partner Rotator Cuff Therapy Exercises as an example. Say someone was interested in advertising on the Rotator Cuff Injury page.

First I’d determine what the main keyword is that this page is optimized for.  This keyword is “rotator cuff injury”. I know this because I have included it in my meta tags, as well as the title, which is the first heading of this page.

Here is a view of the meta data:

You can view the meta tags in the source code of any webpage.  Go to the webpage first.  On Internet Explorer, select the “Options” menu on the top header, then select “View Source”.  If you are using Google Chrome, simply click “Ctrl + U” simultaneously.

Next, go to the Google Adwords Keyword tool and determine the average cost per click advertisers are willing to pay for this keyword.

(CLICK TO ENLARGE IMAGE)

In this example, we can see that advertisers are paying $0.38 or 38 cents per click to be found for this keyword.

Next, go to your analytics software (example: Google Analytics) and determine the number of page views the webpage is generating.  In this case, say the Rotator Cuff Injury page generates 1,200 views per day.

Next, go to your analytics account and determine what the Clickthrough rate is for contextual advertisements such as Google Adsense on this webpage.  If you are not currently displaying Adsense or similar ads, search the internet for average clickthrough rates in your industry to get an idea for what they hover at.

Because Google does not allow disclosure of these figures, I cannot disclose mine.  But let’s say my Clickthrough rate is 5%, which means that 5% of those that view my webpage end up clicking on the private advertisement on it.

Here is how the math eventually plays out:

1,200 page views x 5% clickthrough rate = 60 potential clicks

60 clicks x .38 cents per click = $22.8 rounded off to $23 bucks per month for an ad on this page, or $276 per year for just one advertisement on just one page of this website.

As your website grows, you can adjust these numbers based on the visitor traffic experience.

Here is how I currently advertise on the Rotator Cuff Website:

Multiple Advertisement Offers

Let’s hope a day comes when many advertisers are competing for advertisement space on your website.  What do you do then?

One thing you can do is use the Google Heat Map in conjunction with the math above for relative placement pricing.

Decide where on your web pages you are willing to post private advertisements, and then charge a premium for an ad that is placed in a “hotter” zone than the others.

Here is the Google Heat Map which in my experience has been dead on.

The darker, orange areas are where visitors often focus on.  This is based on numerous extensive studies on internet browsing / reading patterns and eye human sight movement.

Here is an example of multiple ads on a single webpage:

This gives a brief idea of the various possible ad placement on your website.

One Recent Example

I was testing the markets recently and came across RateBrain, who offered me $2.25 per CPM or cost per one thousand views.

Should I take this offer? Well let’s see.  My blog receives over a thousand visitors now and just under 3,000 page views daily. Let’s say 1,000 visitors and 3,000 views for simplicity sake.  This is roughly 90,000 views per month divided by 1,000 = 90.  90 x $2.25 = $202.50 per month for one ad on my blog.

Should I take it?  There are other factors to consider as well. I think although the RateBrain widget would look handsome on any blog, I suspect it would be more relevant to a pure personal finance blog, rather than a hybrid like mine.

That said, I have not completely eliminated the possibility of displaying RateBrain.  Actually I think I might J

Concluding Thoughts

After well over 6 months of running this blog Ad free, I recently I decided that I am going to start accepting private placement ads on my blog.

I thought this discussion was relevant given the point where I am at with this blog.  Where do you stand on your journey?

Are you currently accepting private advertisements on your website or blog? How do you price them? How do you get the offers? Any interesting stories you can share with our readers?

Here are my additional thoughts on getting more private advertisements on your blog or website.

13 Responses to “Determining How Much to Charge for Private Advertisement on Your Website or Blog”

1. Denise @ The Single Saver says:

   March 8, 2011 at 8:46 am

   I wouldn’t turn down advertisements. You work too hard on your blog to not at least consider it. The trick is to keep them tasteful, relevant, and not overly annoying.

   I plan to actively accept ads on TheSingleSaver.com (if anyone is interested, contact me! – hehehe). But I want to keep the ads limited as, although paying for the blog’s upkeep would be nice, I don’t want the ads to distract from the contact.

   Reply
   • Sunil says:

     March 8, 2011 at 12:59 pm

     Welcome Denise, interesting perspective.

     Thanks for your input in the Yak forums. You left out the dot.com part on your name thus the link to your blog doesn’t work. When you get a chance, go back in and edit your Name so the link can work.

     Reply
2. Khaleef @ KNS Financial says:

   March 9, 2011 at 7:49 pm

   This is definitely a great resource for those of us who are new to all of this. I plan to implement this strategy, especially for my new site.

   Reply
   • Sunil says:

     March 9, 2011 at 8:37 pm

     Khaleef, do let me know how it goes for you and what kind of feedback you get from potential advertisers.

     Reply
3. Bogey says:

   March 11, 2011 at 6:32 pm

   This is interesting info to see what income level os possible from a single ad on a blog. My 1 year goal for my blog is to earn $250 per month. Assuming I can continue to increase my traffic, I might be able to pull this off. But the more I read, the more I think I should delay accepting advertisements for as long as possible. I don’t think I’ll even have to worry about it for a long time, as nobody would be knocking down the door to advertise on BNF yet!

   Reply
   • Sunil says:

     March 11, 2011 at 8:14 pm

     I have a feeling if you work for free endlessly you will reach a point where if you do start accepting ads, you will blow by your current goal multiple times over instantly.

     Reply
4. youngandthrifty says:

   March 15, 2011 at 10:50 am

   Wow, this is great sunil 🙂 Its a good resource and I’m going to make sure I bookmark it!

   Reply
   • Sunil says:

     March 15, 2011 at 11:13 am

     Glad you found it useful!

     Reply
5. Tim says:

   June 3, 2011 at 9:45 am

   Thank you for the info. I am JUST getting started with a new photo training site/blog (don’t even have the structure ready yet) and was wondering about what to expect when I am ready. I am really quite a bit away from this, (accepting ads), but am trying to find out the best structure to use – now – in the beginning when I am setting up the site. I understand it is a bit difficult to redesign later.

   The Google Heat Map will greatly help.
   Thank you,
   TimZ – graphicfly.com – the photo training site/blog

   Reply
   • Sunil says:

     June 3, 2011 at 1:52 pm

     Tim, welcome to the blog. The simpler the design the better. Leverage CSS as much as you can, better yet if using a blog platform, read my discussion on the Thesis WordPress theme. Many turnkey programs are readily available for WordPress, which will make your life a LOT easier in the long term.

     Reply
6. Kel Johnson says:

   October 12, 2013 at 11:38 pm

   Wanted to give you kudos on a very insightful write up. We’re currently undergoing a major overhaul of our income model and are transitioning to a free site for users supplemented with targeted ads. Thanks for sharing your experiences and suggestions.

   Reply
   • Sunil says:

     November 10, 2013 at 2:21 pm

     Kel, please tell us more about your previous experiences and what is making you switch strategies?

     Reply
     • Kel Johnson says:

       November 23, 2013 at 9:42 am

       We started out as a software-as-a service fee model but grew to understand that we were also receiving significant traffic from our blog entries as well. The aim is to provide a free product that will keep users engaged in addition to the supplemental information contained on the blog and forums. We should go live within a week with the program but already we’ve gotten great feedback and increased visits with the redesign and announcement that it will cost nothing.

       Reply